Archive | Pitt St

Bidders stay clear of office unit auction

The one property up for auction at Colliers yesterday, an office unit on Pitt St at the top of the cbd, failed to attract a bid.

CBD

Uptown

29 Pitt St, unit 2:
Features: 170m² office unit, secure covered parking space
Outcome: no bid
Agents: Simon Felton & Tony Allsop

Attribution: Auction documents.

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Kiwi Income settles Pitt St sale

Published 3 July 2012

Kiwi Income Property Trust has settled the $55 million sale of Beca House at 21 Pitt St to a private investor.

The trust entered into the unconditional contract in April. The price represented a 2% ($1 million) premium over the trust’s 31 March valuation and reflected an 8% initial yield.

Kiwi Income will use the net sale proceeds to retire bank debt. The sale followed a $5 million makeover of the building, where engineering consultancy Beca Ltd has progressively been taking up residence. Beca Corporate Holdings signed a 9-year lease agreement over 14,400m² of its 16,800m² of office space in 2010. The 10-level Beca House was built in 1990 and acquired by the trust in 1997 for $32.2 million.

It was the headquarters of the Auckland Regional Council until the 2010 local body elections, when the regional council & 7 territorial councils were replaced by the single Auckland Council.

Earlier story:

30 April 2012: Kiwi Income sells Beca House after completing makeover

 

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Kiwi Income sells Beca House after completing makeover

Published 30 April 2012

Kiwi Income Property Trust’s manager said on Friday it had entered into an unconditional contract to sell the newly renamed Beca House at 21 Pitt St, which was the headquarters of the Auckland Regional Council.

Kiwi Income Properties Ltd chief executive Chris Gudgeon started the week telling clients in the trust’s newsletter it had completed the $5 million makeover of the building and that engineering consultancy Beca Ltd had taken naming rights and would progressively take up residence. Beca Corporate Holdings signed a 9-year lease agreement over 14,400m² of its 16,800m² of office space in 2010. The 10-level Beca House was built in 1990 and acquired by the trust in 1997 for $32.2 million.

Mr Gudgeon said: “The sale price of $55 million represents a 2% premium to the asset’s 31 March 2012 valuation of $54 million and reflects an initial yield of 8.0%. Settlement is due to occur on 2 July. The purchaser is a private investor and the sale was brokered by CB Richard Ellis.

“This sale is consistent with our strategy of recycling capital out of mature assets to maintain balance sheet flexibility.”

Mr Gudgeon said the trust’s net bank debt gearing ratio was about 34% at 31 March. “The net sale proceeds from the sale of Beca House and the settlement of the PricewaterhouseCoopers Centre (Christchurch) insurance claim will be used to retire bank debt, reducing the trust’s net bank debt gearing ratio by about 4%.”

CBRE agent Warren Hutt, who negotiated the off-market sale, said it was the city’s largest single office transaction in 2 years. He said the buyer was a New Zealand-based private investor.

Mr Hutt said the deal signalled renewed interest in the New Zealand commercial market from local investors, with particularly strong demand for opportunities in the Auckland cbd.

“While investors are continuing to monitor the ongoing Eurozone debt crisis, the outlook for the domestic economy remains reasonably positive.

“New Zealand interest rates remain low and the major banks are continuing to be relatively aggressive in lending for property acquisitions, which has ensured that the current market sentiment remains upbeat. This has been underpinned by the positive outlook for the Auckland office market, given a lack of new supply and the continued decline in the cbd vacancy rate.”

Mr Hutt said CBRE was fielding buyer interest from a mix of domestic & offshore investors, with European, Hong Kong & other Asian buyers continuing to seek opportunities in New Zealand.

“We’re also seeing strong interest from select European funds for assets priced in the vicinity of $60 million, while Australian funds & other investors remain net sellers.”

Earlier story:

25 April 2012: Kiwi Income keeps law firm for another 3 years, completes Pitt St makeover

 

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Attribution: Company & agency releases, story written by Bob Dey for the Bob Dey Property Report.

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Beca signs for regional council space at 21 Pitt St

Published 2 November 2010

Beca Corporate Holdings Ltd has signed up early with the Kiwi Income Property Trust on a new 9-year lease over 14,000m² of office space at 21 Pitt St, progressively taking over space occupied by the Auckland Regional Council.

The engineering & related consultancy services firm will consolidate its Auckland operations from 3 locations into the Pitt St building, where it currently occupies around 5200m². The new lease over 14,000m² of office space & 206 parking spaces will start on 1 March 2012 and expire on 28 February 2021.

One of the buildings Beca will vacate is 132 Vincent St, owned by DNZ Property Fund Ltd. DNZ said yesterday Beca had has renewed its lease there for a further 2 years & one month, with notice that it will vacate in March 2013.

Kiwi Income management company chief executive Chris Gudgeon said yesterday the transaction was one of the largest new lease deals in Auckland this year and would increase the building’s weighted average lease term to 8.8 years.

The regional council, incorporated into the new unitary Auckland Council from yesterday, will vacate 10,700m² between June-October 2011 as its operations are absorbed into the new council. It will vacate a further 2200m² on 31 January 2015.

Mr Gudgeon said: “This is a good result for the trust, particularly given that Beca is one of Auckland’s last major tenants to settle its accommodation requirements in the current cycle.”

Under the regional council’s original lease term, it had been due to vacate the building in January

2015. However, the Auckland Council, through the Auckland Transition Agency, agreed to surrender most of its space ahead of the original lease expiry with the payment of a surrender fee to the trust, which Mr Gudgeon said saved ratepayers considerable rental expense.

As part of the lease agreement with Beca, the trust will accelerate planned upgrade works to the base building & building services as space is vacated by the regional council.

 

The 10-storey building was completed in 1990 and Kiwi Income bought it in 1997.

Earlier story:

20 August 2010: ARC chairman choked over 37% rent rise

 

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Backpackers is new proposal for Famous Flora’s site

Published 28 June 2010

Jimmy Wu has gone downmarket from last year’s proposal for a hotel on the site of Famous Flora’s massage parlour, on the corner of Pitt & Vincent Sts, with plans now for a modern-style backpackers.

 

The plan last year was for a 170-room 4-star hotel, to have been operated by Sydney-based Metro Hotels, with a restaurant, bar, conference facilities & pool.

 

Now the plan is for an “upper-range backpackers, below a mid-range hotel”, according to architect Dave Foster, who’s been working on the project for Mr Wu & his partners at Gaowoo Holdings Trust.

 

Still following the backpacker dormitory system, the bedding arrangement is “based on a first-class seat in a plane – basically a cubicle”, Mr Foster said.

 

He said they originally wanted to get 60-70 cubicles, but new regulations introduced last week meant 5m²/bed had to be allowed and the new target was 36 cubicles.

 

The ground level of the new building is to have a foodcourt with 5 outlets to service the backpackers & local community, and a drive-through liquor store.

 

The Shell service station’s lease on the corner site expires this Wednesday, 30 June, and the lease on Famous Flora’s expires the following day, although the business has already been closed. Mr Foster said resource consent was still needed for the new proposal.

 

Earlier story:

22 July 2009: Jimmy Wu gets Sydney operator for hotel on Famous Flora’s site

 

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Attribution: Phone interview, story written by Bob Dey for the Bob Dey Property Report.

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Jimmy Wu gets Sydney operator for hotel on Famous Flora’s site

Correction to last paragraph 22 July 2009

Published 20 July 2009

Sydney-based Metro Hotels signed the agreement last week to operate Metro Hotel Auckland, a new 170-room 4-star hotel on the corner of Pitt & Vincent Sts at the top of the Auckland cbd. The site is occupied by a service station & Famous Flora’s massage parlour.

 

The hotel will have a restaurant, bar, conference facilities & pool. It’s due for completion in mid-2011, in time for the Rugby World Cup.

 

Gaowoo Holdings Trust (Gao Zhuoying, Jimmy Wu & Wu Zhenguang, Orakei) is the developer. Peddle Thorp Architects has been commissioned to the design and Hawkins Construction Ltd for the design & construction.

 

It’s the first New Zealand hotel for the Metro Hospitality Group, which is a subsidiary of ASX-listed Transmetro Corp Ltd.

 

Chief operating officer George Bedwani said the group had been looking for some time at opportunities in Auckland, Wellington & Christchurch, with Auckland the main target.

 

Metro Hotels manages 14 hotels, serviced apartments & inns and 4 Paddy Maguire’s pubs in Australia. The group also operates the new mid-range Aspire Hotels brand and took over operation of the Dugong Beach Resort at Groote Eylandt in the Northern Territory in January. It’s owned by the local aboriginal people.

 

Jimmy Wu’s first Auckland development proposal, a decade ago, was for a slim hotel tower on the corner of Albert & Swanson Sts. The latest proposal for that site was by Tim Manning (Norwich Property Group, and formerly of the Taradale Property Group) for a hotel to be built in time for the Rugby World Cup. That proposal has fallen by the wayside and the property has been sold to an Indian group.

 

Last paragraph removed: Mr Wu was not associated with the Winsun Heights development further down Vincent St, which was stated in the original version of this story.

 

Website: Metro Hotels

 

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Attribution: Metro release, company records, story written by Bob Dey for the Bob Dey Property Report.

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